CAMBRIDGE, Mass., and DAVOS, Switzerland, Jan. 21, 2020 /PRNewswire/ -- A new study released today by MIT Sloan Management Review (MIT SMR) and Cognizant reveals that most executives around the world are out of touch with what it takes to lead effectively and for their businesses to stay competitive in the digital economy. Reliance on antiquated and ineffective leadership approaches by the current generation of leaders is undermining organizational performance. To remain competitive and lead effectively, executives will need to fully reimagine leadership, the study's authors have found.
"We are on the precipice of an exciting new world of work, one that gives executives an opportunity to chart a new course for what their leadership should look like, feel like, and be like," said Doug Ready, senior lecturer in organization effectiveness at the MIT Sloan School of Management and guest editor of the report. "Yet, our study suggests that digitalization, upstart competitors, the need for breakneck speed and agility, and an increasingly diverse and demanding workforce demand more from leaders than what most can offer. The sobering data underscores the urgent need for a fully reimagined playbook for leaders in the coming digital age."
Only 12% of respondents strongly agree their own business leaders have the right mindsets to lead them forward, and only 9% agree that their organization has the skills at the top to thrive in the digital economy.
Only 13% strongly agree their organizations are prepared to compete in increasingly digitally-driven markets and economies.
A large majority, 71%, of respondents believe that they are personally prepared to lead in the digital economy. The same group scores significantly lower when asked whether they possess specific digital skills, such as using data analytics to influence their decision-making (55%) or advocating for the use of machine learning technologies in their organizations' operations (50%).
While 82% agree the new economy will need "digitally savvy" leaders, less than 10% strongly agree their organizations have the right leadership to thrive in the new digital economy.
Just 40% believe that their organizations are taking the necessary steps to build robust digital leader pipelines.
"A generation of leaders in large companies are out of sync, out of tune, and out of touch with their workforces, markets, and competitive landscapes. What got them to their current exalted status won't be effective much longer — unless they take swift action," said Benjamin Pring, report coauthor and director of the Center for the Future of Work for Cognizant. "Allowing unprepared senior executives with outdated skills and attitudes to stick around forces next-generation, high-potential leaders to move on to new pastures, which harms morale and ultimately shifts the organization further away from where market demand is heading."
The authors identify three categories of existing leadership behaviors (the 3Es); these include:
Eroding behaviors, or antiquated leadership patterns such as relying upon hierarchy for influence, command-and-control decision-making, and rigid strategic planning.
Enduring behaviors, evergreen and time-tested leadership attributes and behaviors including ethics, trust, and integrity.
Emerging behaviors, including digital savviness and collaboration skills.
"Our experience suggests that the most advanced leadership teams are those committed to developing these 3Es in their organizations," added Carol Cohen, report coauthor and senior vice president, global head of talent management and leadership at Cognizant. "A key to success is artfully introducing new leadership approaches that particularly appeal to a new generation of employees while at the same time honoring the time-tested behaviors and attributes that inspire trust, build a sense of community, and motivate employees to improve performance."
The authors caution that the primary leadership challenges in the digital economy are not solved by merely adopting a group of these 3E behaviors but require developing new mindsets that anchor, inform, and advance these behaviors. They identified four distinct mindsets that together constitute what they believe are the new leadership hallmarks in the digital economy and illustrate through data and case studies how they can shape successful leadership. They include:
Producer mindset: The producer mindset combines a focus on customers with a focus on analytics, digital savviness, execution, and outcomes.
Investor mindset: Leaders with an investor mindset pursue a higher purpose than shareholder returns.
Connector mindset: The connector mindset demonstrates a mastery of relationships, partnerships, and networks to drive organizational effectiveness.
Explorer mindset: Explorers are curious, creative, and operate well in ambiguous situations. They engage in continuous experimentation, encourage failure, and learn by listening to a variety of voices.
The report also offers further recommendations for a new leadership playbook and briefs leaders on the need to articulate a powerful leadership narrative, build communities of leaders, demand diversity and inclusion, and align talent, leadership, and business strategies.
About the Authors: Doug Readyis a senior lecturer in organizational effectiveness at the MIT Sloan School of Management, the founder and CEO of the International Consortium for Executive Development Research, and an MIT Sloan Management Review guest editor.
Carol Cohen is a senior vice president of global talent management and leadership at Cognizant. She is a founding board member of the $100 million Cognizant U.S. Foundation, and a board member of the National Center for Women and Information Technology.
David Kiron is executive editor, Big Ideas, at MIT Sloan Management Review. For the last eight years, he has led MIT SMR's research efforts in the areas of artificial intelligence, the future of work, sustainability, digital transformation, internet of things, and other pivotal management topics.
Benjamin Pring cofounded and leads Cognizant's Center for the Future of Work. He is a coauthor of a number of bestselling and award-winning books on how new technologies are changing the future of work.
About MIT Sloan Management Review At MIT Sloan Management Review (MIT SMR), we share with our readers an excitement and curiosity about how the practice of management is transforming in the digital age. Our expert contributors help leaders explore the trends that are shaping how organizations operate, compete, and create value in a technology-fueled world. We deliver the kind of evidence-based analysis and practical insight that will inspire leaders to do great work.
About Cognizant Cognizant (Nasdaq-100: CTSH) is one of the world's leading professional services companies, transforming clients' business, operating, and technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build, and run more innovative and efficient businesses. Headquartered in the U.S., Cognizant is ranked 193 on the Fortune 500 and is consistently listed among the most admired companies in the world. Learn how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.